Pension providers’ shares plunge on non-compulsory annuities
Shares in UK-listed pension providers are feeling the heat after chancellor George Osborne’s announcement that pensioners will no longer have to buy an annuity.
Shares in Legal & General have plummeted seven per cent, to 214p.
Source: Google
Aviva has shed over four per cent to 495p, and Standard Life has seen shares fall almost three per cent.
Hargreaves Lansdown, meanwhile, is up almost six per cent, after announcing earlier this month its plans to cut fees on some of its pension products.
Source: Google
Despite initial investor fright, John Overs, partner at Berwin Leighton Paisner, said the news is good for the financial services industry. By giving pensioners more choice, companies may earn less from annuities, he said, but then they’ll see an uplift from the sale of other products.
This will be a mutually beneficial situation for companies and individuals, leading to greater diversity and competition within financial services.